(Bloomberg) — Investors are flocking to US equities as they grow more certain of a September cut by the Federal Reserve and that Donald Trump will win the US presidential election, according to Bank of America Corp. strategists.
US equity funds absorbed about $45 billion — the fourth-largest inflow on record — in the week through Wednesday, a team led by Michael Hartnett wrote in a note, citing EPFR Global data. Small-cap funds had $9.9 billion of inflows, the second-largest ever, while large-cap funds received $27.4 billion.
Traders are turning bullish ahead of the first Fed cut, the strategist said. Investors are now assigning a 100% probability of a Fed rate cut in September, a 75% probability of Trump winning the US presidential election and a 68% probability of a “soft landing” in the next 12 months, he added.
In his view, risk appetite is rotating, rather than retreating. He expects flows to go to gold from the dollar,…
